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As you start the new year, learn from the five most valuable lessons I’ve learned in my career as an entrepreneur.
1. Spend smart.
This year I tested a computer file-sharing program which, while free at first, required a paid upgrade given my company’s volume. My management team and I decided to spend the money because the service had revolutionized the cooperation between employees working inside and outside the office. Whether you are in start-up mode, enjoying a growth spurt, or trying to keep things on track, the most important decisions you make for your business should never be made with cost as the guiding principle. Substitute the concept of “cost” with the question of “value” instead.
2. Dump year-end bonuses.
We have always broken out yearly sales goals for my reps into monthly amounts to make tracking easier, but this year we incentivized our reps according to a monthly goal as well. We paid them half of the yearly goal percentage for monthly results, and the rest based on the annual goal being met. For the first time, every team member hit goal, sales soared, and company finances were eased by not having to pay the goal money in one lump sum. Employees, unlike owners, have a hard time seeing long-term. By creating a bonus system that feels immediately linked to the short term projects on which employees are working, rather than waiting until the end of the year to reward them for their contributions, you can boost employee morale and your company’s bottom line.
3. Ask your customers what they want.
In 2012, we launched a line of ear jewelry that customers love. However, they complained that one size did not fit all. So we modified it with a clever movable piece, and by doing that, sold more, reduced unnecessary stock in multiple sizes, and freed up budget for other products. Never have business owners had the ability to give the customer as much voice as we can today. Customers are your best resource when it comes to creating, tweaking, and expanding your product line. Ask for their feedback on product ideas, solicit their comments on your current lines, seek their suggestions for product extensions. They will save you from making costly mistakes and tell you what you need to do to sell more.